Cost-Efficiency of Breast Cancer Care in the US Military Health System: An Economic Evaluation in Direct and Purchased Care

INTRODUCTION

With the rising costs of cancer care, it is critical to evaluate the overall cost-efficiency of care in real-world settings. In the United States, breast cancer accounts for the largest portion of cancer care spending due to high incidence and prevalence. The purpose of this study is to assess the relationship between breast cancer costs in the first 6 months after diagnosis and clinical outcomes by care source (direct or purchased) in the universal-access US Military Health System (MHS).

MATERIALS AND METHODS

We conducted a retrospective analysis of data from the Department of Defense Central Cancer Registry and MHS Data Repository administrative records. The institutional review boards of the Walter Reed National Military Medical Center and the Defense Health Agency reviewed and approved the data linkage. We used the linked data to identify women aged 40-64 who were diagnosed with pathologically-confirmed breast cancer between 2003 and 2007 with at least 1 year of follow-up through December 31, 2008. We identified cancer treatment from administrative data using relevant medical procedure and billing codes and extracted costs paid by the MHS for each claim. Multivariable Cox proportional hazards models estimated hazards ratios (HR) and 95% confidence intervals (CI) for recurrence or all-cause death as a function of breast cancer cost in tertiles.

RESULTS

The median cost per patient (n = 2,490) for cancer care was $16,741 (interquartile range $9,268, $28,742) in the first 6 months after diagnosis. In direct care, women in the highest cost tertile had a lower risk for clinical outcomes compared to women in the lowest cost tertile (HR 0.58, 95% CI 0.35, 0.96). When outcomes were evaluated separately, there was a statistically significant inverse association between higher cost and risk of death (p-trend = 0.025) for women receiving direct care. These associations were not observed among women using purchased care or both care sources.

CONCLUSIONS

In the MHS, higher breast cancer costs in the first 6 months after diagnosis were associated with lower risk for clinical outcomes in direct care, but not in purchased care. Organizational, institutional, and provider-level factors may contribute to the observed differences by care source. Replication of our findings in breast and other tumor sites may have implications for informing cancer care financing and value-based reimbursement policy.

Costs for Colon Cancer Treatment Comparing Benefit Types and Care Sources in the US Military Health System

INTRODUCTION

Cancer is one of the leading causes of morbidity and mortality in the USA, contributing largely to US healthcare spending. Provision of services (direct or purchased) and insurance benefit type may impact cost for cancer care. As a common cause of cancer in both men and women, we aim to compare colon cancer treatment costs between insurance benefit types and care sources in the US Military Health System (MHS) to better understand whether and to what extent these system factors impact cancer care costs.

MATERIALS AND METHODS

Department of Defense Central Cancer Registry records and MHS Data Repository administrative claims were used to identify MHS beneficiaries aged 18-64 who were diagnosed with primary colon adenocarcinoma and received treatment between 2003 and 2008. The data linkage was approved by the Institutional Review Boards of the Walter Reed National Military Medical Center, the Defense Health Agency, and the National Institutes of Health. Costs to the MHS for each claim related to cancer treatment were extracted from the linked data and adjusted to 2008 USD. We used quantile regression models to compare median cancer treatment costs between benefit types and care sources (direct, purchased, or both), adjusted for demographic, tumor, and treatment characteristics.

RESULTS

The median per capita (n = 801) costs for colon cancer care were $60,321 (interquartile range $24,625, $159,729) over a median follow-up of 1.7 years. The model-estimated treatment costs were similar between benefit types. Patients using direct care had significantly lower estimated median costs [$34,145 (standard error $4,326)] than patients using purchased care [$106,395 ($10,559)] or both care sources [$82,439 ($13,330)], controlled for patient demographic, tumor, and treatment characteristics. Differences in cost by care source were noted for patients with later stage tumors and by treatment type. Relative costs were 2-3 times higher for purchased care compared to direct care for patients with late-stage tumors and for patients receiving chemotherapy or radiation treatment.

CONCLUSIONS

In the MHS, median cost for colon cancer treatment was lower in direct care compared to purchased care or patients using a combination of direct and purchased care. The variation in cancer treatment costs between care sources may be due to differences in treatment incentives or capabilities. Additional studies on cost differences between direct and purchased services are needed to understand how provision of care affects cancer treatment costs and to identify possible targets for cost reduction.

Preparing for Value-Based Payment: A Stepwise Approach for Cancer Centers

Most cancer centers are ill-equipped to pursue value-based payment (VBP) because of limited information on their population’s cost of care. Herein, we outline the stepwise approach used by Smilow Cancer Hospital at Yale-New Haven in our pursuit of better value care. First, we addressed institutional barriers. A move toward value required demonstration to Yale-New Haven Health System leadership that OCM would improve patient care, fund new infrastructure, and provide the opportunity to gain experience with VBP without a major threat to the financial stability of the health system. We evaluated patterns of care and found that of patients presenting to the emergency department (ED), 88% were admitted, 62% arrived during the workday, and 50% could have been stabilized with urgent care services. Within 30 days of death, 27% were admitted to the intensive care unit, 38% presented to the ED, and 52% were admitted. To quantify total cost of care, we accessed the 5% Medicare Limited Data Set to map out total cost of care for patients receiving chemotherapy at Smilow Cancer Hospital. Costs increased as patients moved through 6-month episodes, used the ED (patients with two or more visits were twice as expensive as those with one or fewer), or died during an episode (costs were twice as high as episodes in which the patient lived). To determine strategic interventions to improve value, we targeted investments in urgent care to reduce ED utilization, care management to prevent hospital admissions, and referral to palliative care for clarification of goals of care and avoidance of costly futile treatment. Developing internal metrics to evaluate success will require monitoring our interventions by having utilization measures for each site of care and individual provider.